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No Bumper Crop, but Bans Aplenty for Monsanto

Germany's move won't be a major hit to sales, but it's the thought that counts.

Monsanto(NYSE:MON) has a problem. It's a pretty minor one, but the agriculture giant needs to keep the damage to a minimum lest the problem throw fuel on the fire.

On Tuesday, Germany banned the planting of one of Monsanto's genetically modified (GMO) corn seeds, MON 810. The ban shouldn't hurt sales much because the crop is grown on less than 1% of the fields in Germany, but it's the sentiment that counts.

Germany joins France, Austria, Hungary, Greece, and Luxembourg, which have also banned the corn that has been approved for planting in Europe for 10 years. There aren't many agricultural powerhouses in that group, but that's not the point: Once the movement starts, other countries can use the bans as ammunition to fight Monsanto. If the bans snowball, it could affect the sentiment of consumers as to the safety of the GMO produce. Without consumers to eat the corn or feed it to livestock, farmers won't plant GMO corn in countries where it's legal to do so.

Investors in other biotech companies that sell GMO seeds shouldn't think they're off the hook. While MON 810 has been the only corn approved for planting in Europe (and thus the only one banned by Germany), the EU is on the verge of approving biotech corn from Syngenta(NYSE:SYT), DuPont(NYSE:DD), and Dow Chemical(NYSE:DOW). I imagine the newly approved seeds will get the same censorious treatment.

While they've made progress, especially in the U.S., biotech corn producers have a long way to go before they're going to be widely accepted across the globe. The good news is that I think we're entering an era when the traits in GMO crops are more widely accepted by the general public. For instance, it's much easier for the public to get behind corn that's resistant to drought than one that's resistant to the weed killer ROUNDUP. Both help increase the yield, but using less water sounds more appealing than using more chemicals.

Whether it's Microsoft's (NASDAQ:MSFT) monopoly issues with Internet Explorer or Wal-Mart's (NYSE:WMT) image of being a bully to mom-and-pop stores, companies need to keep their public imagine from going haywire. Monsanto should nip this in the bud, schnell -- that's fast in German.